Defaulted PayDay Loan

QUESTION: Can I be sued in the Texas for a defaulted online payday loan?

I taken out a few payday loans online and pretty much got in over my head paying them back ! Can I be sued in Texas?

ANSWER: Most payday lenders do not sue in Texas. Having said that, they are certainly entitled to sue you if you defaulted on a loan.

I would be curious to know who is threatening the lawsuit and whether they are a “usual suspect” – – the kind of payday lender that actually does file suit in Texas. If they are not customarily in court, then their threat is illegal, and possibly a violation of either the Texas Debt Collection Act and/or the Federal Fair Debt Collection Practices Act. The collection industry for payday lenders is infamous for being abusive. I would suggest you keep track of all collection phone calls and keep all of the collection letters.

If the threat to sue is in writing, I would suggest you forward a copy to a consumer rights attorney. If the threat to sue is made verbally, you might still want to talk to an experienced consumer rights attorney who can do a bit of research and find out whether this collector is blowing smoke, or not.

Finally, you might want to have a look at your credit bureau reports through (That is where you can get your credit reports for free.)

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.


Not Showing Up To A Civil Suit Court Appearance

QUESTION: What would happen if I do not show up to a hearing concerning credit card breach of contract?

I am a house wife who made regular payments until my husband stopped giving me any money to pay on credit card and anything else at all . I have no income at all to work with and had to move out of our house and in with family just to stay alive due to him canceling my medical insurance and not buying food for the house now I am being sued.

ANSWER: The collection industry can be ruthless. They don’t care what your circumstances: if they can legally collect against you, they will.

Depending on all of the circumstances surrounding your finances, you may want to consider bankruptcy. Bankruptcy will stop the lawsuit against you dead in its tracks.

Otherwise, I suggest you do everything possible to defend yourself. If you/family can afford to hire a consumer rights attorney, that’s your best bet. The creditor/plaintiff is likely to get a judgment against you by default. Even if you cannot afford to pay for the judgment now, the judgment-creditors are patient: they will wait until you find employment, re-marry, gain an inheritance, or win the lottery. Meanwhile, a judgment on your credit reports can be devastating. You should do everything you can to avoid having a judgment entered against you.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.


Getting Sued Over A Debt Already Paid

QUESTION: A collection agency says they’re going to sue me over a debt I already paid, I don’t know what to do.

I have a few emails of paid in full, but a couple of the companies didn’t send me anything, and when I tried to call them it says it’s no longer a working number.

ANSWER: First of all, I would suggest that you pull a copy of your credit bureau reports. You may obtain a free copy through www. It is the only website that the Federal Trade Commission has approved of for a free credit report. You might find useful information on that website. Also, do you have old bank statements or cancelled checks to prove you paid?

If a third party debt collector is threatening to sue you on a debt that has been paid (whether you can prove it right now, OR NOT) then it seems your rights have been violated. I would suggest you contact a consumer rights attorney who has experience going after abusive debt collectors. They will probably want to look up this debt collector that is threatening to sue you. Specifically, they will want to see if this debt buyer is a common litigator; and also, they will want to find out if this debt collector has a surety bond on file with the Texas Secretary of State. If they do not, then this whole thing sounds like a scam- an illegal scam.

Keep in mind that the federal Fair Debt Collection Practices Act allows you to collect a statutory award, other damages, as well as your attorney fees. That is the reason why many consumer rights attorneys do not charge clients up front for their time. They can get paid for by the defendants. I strongly suggest you get your payment history together and call a consumer rights attorney licensed in Texas.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.


Sued By A Junk Debt Collector

QUESTION: Sued by a junk debt collector for $1500 on unsecured CC debt from 2011.  This clearly seems to be an attempt to get a default judgment by an attorney who expects that I will not answer. I’ll pay $250 to any licensed TX attorney who will answer on my behalf in the expectation that the junk debt collector will abandon hope due to the presence of an attorney and the weak claim. I seem to be one of many thousands of people who received court docs today judging by the quality of the summons. I’ve been doing research and this seems very easy to defeat. I’m wondering whether or not I should even bother to research how to defeat this when there might be an attorney willing to accept $250 to do it for me.

Last payment on the card was March 19th, 2011. I was served by someone in a $200 car on March 26th, 2015. The lawyer lives 300 miles away. The summons is very sketchy looking.

ANSWER: I don’t know who sued you and who their lawyers are. The debt buyer industry has been empowered over the last 2-3 years for a whole host of reasons. Yes, they may simply be interested in obtaining a default judgment. On the other hand, I have had many debt buyers – the likes of Midland Funding, Portfolio Recovery Associates, and many others up put a fight, even for very low balances. Their attorneys are in court with huge dockets all set for the same day: it is unlikely they would be coming to court for your case only. Plus, if this is a lawsuit in the Justice of the Peace court system, then the Texas Rules of Civil Procedure are severely relaxed, making it much easier to obtain a judgment.

You seem to be a terrific negotiator, considering your online bidding efforts here. Any lawyer that makes an appearance for you in an answer is on the hook for the entire case, not just the answer. An attorney who values their law license and their reputation will not get hired for the limited purpose of filing an answer and then asking the court to withdraw from your case. (I may be wrong, of course.)

If you fail to answer the lawsuit, or if you appear – pro se or through an attorney – and lose the case, the judgment will likely be significantly higher than $1,500.00, including interest, fees, court costs and attorney fees. The damage to your credit report, as well as the risk of post-judgment collection would be reasons for you to hire an experienced attorney.


Debts From Deceased Relatives

QUESTION: My husband and I were separated for nearly a year. Am I responsible for his electric bill ? He passed away.  He was way behind in all bills. I have bills of my own showing where I lived.

ANSWER: A collection agency or creditor may want to assert that the debt is “community debt” which means that it belongs to both you and your late husband. The burden will be on you to show that you two were separated and that you did not benefit from some of his expenses – – like the electric bill at an address where you never resided.

You should be aware that the debt collection industry preying on the heirs of deceased people can be extremely harassing and abusive. They frequently play on people’s sense of grief and guilt. All of your husband’s creditors should take up their claims in probate court, and NOT by harassing you.

I strongly recommend that you check your credit bureau reports to confirm that his debts are not listed on your social security number. You can obtain a free copy of your credit bureau report at

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.


Getting Sued By A Pay Day Lender

QUESTION: I have multiple online payday loans out since 2012 can they sue me?

I tried to work out arrangements with them but they wouldn’t settle what I could afford and refuse to give me an address to mail payments to them can I be in legal trouble?

ANSWER:  Theoretically, they can sue you. Generally, however, the payday loan collection industry is notorious for its illegal debt collection tactics. I recommend you consult with a consumer rights attorney, not just to review the terms of the payday loans, but also to determine if your rights have been violated (as well as your credit reporting rights.) 

Many consumer rights attorneys do not charge their clients up front, because many of the consumer rights statutes allow them to collect fees from the bad guys.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

Harassed By Multiple Debt Collection Calls

QUESTION: Does Rent A Center have the right to call 45 times a day after being late 2 days (actual number). I’m being harassed I feel upon arrival to my home I had 15 rent a center door panels posted on my doors and windows that is wrong.

ANSWER: It’s important to find out whether you answered all of those calls, or if they simply went unanswered. Also, I’m not sure what you mean by “door panels” that were posted on your doors and windows. I agree that you should keep pictures of the door panels as evidence of harassment. You should also keep screen captures of the 45 phone calls. If you are actually answering the phone, and you keep responding to them in the exact same way in each phone call, then I would agree that your rights have been violated.

More importantly: if the contract allows them to repossess some collateral, then they might not be violating debt collection laws (because they are not attempting to collect a debt). Instead, they are simply harassing you to try to get their collateral back. Common law harassment claims are slightly different from claims for debt collection abuse. In either case, I suggest you contact an attorney.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

How To Proceed With Payment Request Letters Totaling $10,000 From A Collection Agencies

It is important to recognize and understand that if you ever find yourself in such a situation your credit score is probably very low. Thus it will be extremely challenging obtaining the best interest rates for any financing (if you even qualify). At the same token, a lot of the very small debt out there (under $1,000.00) ends up on the debtor’s credit report, ends up in collections, but does *not* end up in a lawsuit. While I do not encourage debtors to avoid paying their bills, it is also clear that one may not be in a position where the debtor can legitimately afford to pay the delinquent bills. The negative lines on a credit report will slowly age, have less impact on the credit score, and after 7 years they will come off altogether.

If one happens to have any particular debt that is significantly over $1,000.00, then there is the possibility of being sued for that debt.

If you ever find yourself in such a situation, it is strongly recommended that you keep track of all debt collection calls that are made to you or anyone else. Most consumers are unaware, that they has debt collection rights. You can download a debt collection call log from my law firm’s website to help keep track of callers. Also, whatever debt collection mail that is received should be reviewed by an attorney. Keep in mind that often times debt collection letters have violations in them, and the consumers are really not knowledgeable enough to notice. Also keep in mind that most consumer rights lawyers will not charge an un front fee to handle debt collection abuse; federal and state laws allow consumers to collect their attorneys’ fees from the “bad guys.”

You should obtain a copy of your credit reports. They are available for free, once every year through It will enable you to have a complete picture of your debt.

Here are some additional suggestions to bear in mind:
1. Do not ignore the collection letters. Keep them; share them with a consumer right’s lawyer. You are welcome to send them all to my office so that I can advise further.
2. Sometimes it is worth considering calling the debt collection agencies to possibly work out a payment plan, but only after you have shared the collection letters with an attorney in the field of consumer rights. It is important to understand that sometimes paying one collector will open a jar of worms with others who are constantly looking at your credit report and probably wondering, “why is this person paying that debt, and not this one?”
3. $10k worth of debt is probably not enough to make bankruptcy the best option.
4. Bill consolidations is hardly ever the best way to go. Nevertheless, one should consult with an attorney to determine whether the debts may ultimately end up in litigation. If that’s the case, then debt consolidation may operate to prevent an imminent lawsuit.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

Debt Collection Tactics

Debt collectors are notorious for engaging in what can often be described as abusive and harassing tactics in order to collect a debt. Some debt collectors will even go as far as threatening to come to your home or place of employment to serve you with lawsuit papers. In my experience, these particular debt collectors are the worst of the worst, and most often they usually are not even licensed to collect debt in Texas.

If, however, the party that was calling happens to be a legitimate debt collection agency, then one would probably be within their rights to sue them for violations of the federal and Texas debt collection laws. My office has handled many suits against abusive debt collectors. The laws allow the consumer to recover damages, in addition to all of the attorney fees and costs incurred while suing the debt collector. Many consumer rights lawyers will handle debt collection abuse cases on a contingency basis.

Before proceeding with a lawsuit, it is advisable pull your credit report to determine if the particular collection agency in question is listed. Depending on when the account in question went into default, it may or may not appear as a negative comment on your credit report. A free copy of your credit report can be downloaded once every year from Any suspicious lines listed on your credit reports should also be taken up with a consumer rights attorney.

Finally, if you have the name and/or phone number of the collection agency, and especially if you have any recordings, feel free to send that information along. My office will gladly do some research to determine if the collection agency is legitimate.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

I defaulted on a credit card some years back and now this random collection agency is telling me they’ll sue me if I don’t pay.

Consumer “They keep threatening me. Gee, I don’t even know who they are. First it was one company, now this other company is calling and I could swear that there is a third number calling me also.”

* First of all, it’s important to know that creditors CAN sue consumers in state, county, or precinct civil courts for failure to pay a debt.
* Keep in mind that if you get sued, it does not automatically mean that you need to pay the debt.
* Consider your consumer rights. A collector cannot lawfully sue on a debt that is past the statute of limitations which, in Texas, is four years for most debts. That means, that if the date the lawsuit gets filed is more than 4 years after the date of default on the account [usually 30 days after your last payment], you may a defense to the suit. You might also be able to assert that the collection agency or debt buyer is violating YOUR RIGHTS by suing you past the applicable statute of limitations.
* Assuming they sue within the 4 year statute, it still does not mean that you should fold and pay the debt. In many cases, 3rd party debt buyers do not have adequate proof that they own the accounts for which they are suing. If a judge agrees that the plaintiff cannot prove it, you might not be obligated to pay at all. What if the named plaintiff does not actually own the account? It is fair for you to question ownership, especially if you have been contacted by several different collectors. There is no way for the common consumer to know who or what collection agency actually owns the debt.

It is best to consult with a consumer attorney to find out what your rights are.
Remember, this blog covers consumer rights as they relate to Texas State law. If you reside outside of the State of Texas, please consult with a local attorney.

You can find a consumer attorney by visiting